Market Comments: 4-29-2009
In my post last week I wrote about where I thought we were in the “cycle” of the normal ups and downs of the market. Although the market action has been pretty tame this week, I’m still in the same place… expecting some sort of a sell off that will help me to determine what our intermediate term direction might be.
When you look at the chart from last week’s post, you might see some similarities to a bouncing ball. I see them and I find that by using this “bouncing ball” analogy, I can get a better “feel” for what the market is doing at some certain junctures… now happens to be one of those times.
Just by looking at the picture here, you can see a number of similarities such as the progressive ‘arcing’ and lower highs, etc. It would probably look a little more accurate as a comparator to the stock market if you imagined that you were bouncing the ball while riding on a rollercoaster… or something like that.
Regardless, the simple little picture here is enough to illustrate what’s going on right now… we are possibly at the top of an arc and the ball is moving the slowest it will ever move.
Right now daily moves are moderate, but more importantly multiple-day ‘net’ moves are almost zero, making upside or downside progress (motion) almost zero. It is at these spots that the market is in the best position to reverse direction and then accelerate again until it hits another bottom.
